EU, Mercosur press for year-end trade deal despite resistance

A trade deal between the European Union and the Latin American countries represented by Mercosur are could be concluded by the end of the year, despite resistance from European agricultural interests.

The EU is currently negotiating a trade agreement with the four founding members of Mercosur: Argentina, Brazil, Paraguay, and Uruguay. Venezuela has been a member of Mercosur since 2012 and is an observer in the trade negotiations, but is not a party to the trade negotiations.

Agreement has been a long time in the making. A Framework Cooperation Agreement was struck in 1999 and the EU-Mercosur negotiations re-launched in 2010. Negotiations were paused in 2012, to be reopened in 2016.

European Commission chief Jean-Claude Juncker believes that the end could be in sight. He said that the EU will push to conclude the talks with the Southern American bloc by the end of next year.

Speaking at a press conference this week, Juncker commented: “We will continue to do everything we can to conclude the negotiations with Mercosur before the end of the year.”​

Junker added that the EU-Mercosur deal would be the EU’s “the most important trade agreement in terms of volume”.​

The latest negotiation round took place this month in Brasilia and a spokesperson for Brazilian trade body Apex-Brasil said that the talks are “advancing at a steady pace”.​

“Our negotiators have now received the completed EU market access offer and will be analysing it, together with our Mercosur partners,”​ the spokesperson said.

French and Irish farmers concerned

There is a concern among Europe’s big agri-food producers, primarily France and Ireland, that increased access will mean European producers are undercut by cheaper imports from Southern America.

French President Emmanuel Macron spoke last week of the need for a “principle of reciprocity”​ in the EU’s trade negotiations and called for a balance to be struck between “openness and protection”.​

Ireland’s Taoiseach Leo Varadkar visited France this week to meet President Macron and improve bilateral negotiations. Irish farming union, the IFA, stressed that this was an important opportunity to demonstrate Ireland’s support for Macron’s pushback against the trade deal.

“The threat posed by the Mercosur deal to EU agriculture and especially the beef sector should be to the forefront of the discussions,”​ IFA President Joe Healy urged. “The beef sector in Ireland is more important to our national economy than any other member state. The Taoiseach has recently raised the danger for Irish beef farmers in the event of a Mercosur deal with the Commission President Jean Claude Junckner, and we expect him to keep our concerns to the forefront at EU level.”​

In particular, Healy insisted that there is a “huge gulf”​ between production standards in the EU and Mercosur countries. “It is completely unacceptable that the EU Commission continues to accept this policy of double standards when it comes to imports.”​

More than commodities

Apex-Brasil contested the assertion that there is a distinction between production standards in the EU and Mercosur countries and argued that the trade deal is about more than agricultural products.

“Access for the high-quality agricultural goods Brazil produces remains one of our core priorities in these negotiations. However, reducing what could be the EU’s second largest trade agreement to a commodities deal would be misguided. Brazil has a diversified trade with the EU, which we hope this agreement will boost.”​

The spokesperson added that Mercosur could be open to commencing negotiations over a trade deal with the UK post-Brexit. “With trade liberalisation topping our commercial agenda, Brazil is eager to further diversify its trading partners. Achieving ambitious market access for strategic agricultural sectors will be of core importance in any negotiation Mercosur embarks in.”​